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Tax on bonus shares

16 August 2017

The Bonus shares issued are declared as Dividend, Am I right here? Do I need to show the details of Bonus shares in ITR as Short Term Capital Gains or Long Term Capital Gains?

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2 Replies

Abhishek Pithisaria (Student) (150 Points)
Replied 17 August 2017

Bonus shares are only to be treated as bonus shares and not dividend as per my undwrstanding. There is no tax liability when bonus shares are issued by the company. It only increases the number of shares and decreases the face value of the shares but the cost price remains the same.

Giridhar S Karandikar (Team Lead) (7553 Points)
Replied 17 August 2017

bonus shares are issued by the company in lieu of dividend. the count of bonus shares get added to your portfolio. if it is held for more than 1 year then there is no tax liability